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Additional Amount Ettl* mated that can be spent in calendar year 19^0 if this /program la adopted ( illions of dollar*?) A. "rejects which are in aaajor part or in whole self*liquidating: 1. Increase in the borrowing powers of the United 3tatet Housing Authority by ^SO million 200 Reduction of F.H.A. ajasclaum interest in r<c ord with the decline in long-term borrowing rates on high grade securities. The Federal Mortgage Association (under .F.C.) buying rate for F.K*A. mortgage* should be reduced correspondingly in order to rmake effective the reduction in the F.K.A. r tes 3« Expansion of the self-liquidating portion of the farm Tenancy ProffTaa to reach u^ to an additional 500,000 families of ?*ry low Income who hare not yet received any assistance from the Farm Tenancy rograffi« Present ograta c^lls for $1©5 million expenditure, of which 1110 million Is self-liquidating. This proposal would reduce the appropriable* for the self-liquidating nortion of the program to $100 million and grant power to borrow up to an additional 1^00 million in the fiscal yeer 19^0 for self-liquidating -rejects developed during that year *K>0 U, Expansion of rur.^1 electrification program to reach a maximum of one and a quarter million rurnl families not now receiving electric service nor likely to receive such service In the near future. resent program calls for exrenditure of t*M5 million for the next fiscal JUBT* This proposal nroTides for a $50 million roprifttion and borrowing capacity up to ten times that amount for a ten year self-liauldating rroject 150 5. Federal toll authority. Self^llqultlng toll roads, canals, bridge projects, --jfograa aubsaltted by Bureau of Public r^oads calls for a $3 billion program for the next four ye«srs. oasibly |1 billion *#ould be letely self-llquidatimj, of ^hich 1300 million might be expended in the calen dar year IQil-O. The ^Fepoeal is to give this authority borrowing capacity up to $1 billion for the four year nrograa $00 - 2 6. Extension of short-term and long-term loans for the purpose of rsromotlng foreign trade. An expenditure of $500 million over tht next couple of years for suoh purposes Is feasible, of ^hioh fJOO million could be used in 19^0. 7. To stimulate construction of nonFederal public work ft of purely ^el f-f inanoiijg tyre the Preside*! could direct the #FC to make the loans at a sufficiently low rate of interest to stimulate borrowing tor this purpose. The n i l 9t interest envisaged as necessary to get r e s u l t s is a lower rat*'than the hTC customarily c't. No additional legislation will be necessary as the RFO already possesses this S. Mnilroad equipment construction. The aaln sector of prlvfets enterprise in which ex "enditurns *MH> laffed «ad vteers the most serious bottleneck*? will arise in the event of further roeirked recovery is railroad equiptxpendlturei be secured in this field sttHtr (a) By securing speolfio author!station for the R^*C to sake equipment loans at loir r«»tfs of Inter* at to thf» full coat of equipiaent for longer than customary raatuikitlfts and to hav# the funds available for suoh purposes lBers>eed« uch I'-ians should be available only for orders placed within SJ year and interest oould well be waived for a two feai1 I «srlod. (b) By establishing a ?.• elf-financing railroad equipment authority to purchase • nd leeee equipment to the raiXreede« in this Way we oould smke absolutely certain that n^oesear^y equipment in sireoble volume eBOld be constructed in tht next twelve months. Neither of these methods would Involve any charge on the budget, if the RfO is authorised to subscribe to the c«*rlt#l of the corporation. 300 rreject8 v^iich are not self- 9. Rapid expansion of the Food Stamp Ian for distributing surplus commodities to all communities and extension to cover more corns o1 i t l«*gt including cotton t e x t i l e s , clothing and dairy projects. the pre^f-nt appropriationft*tk®&for (|113 Million added to t90 million otherwise available) *dll leave $100 million available for the Food stamp Plan for the fiscal ye.^r 19^0. Thin nrogram a«i.k3 for X) million «or«. Th million which would th«n be available for the 'food Stamp PlaB would take oare of the bulk of the e l i g i b l e rwsons now receiving some form of fublio assistenoe, 200 10. Expansion on a nation-wicie basis of t h t s®lf*help cooperatives, now successfully operated in '^ahlngton, B.C., iichmond ntA many Vestern S%at««« (Appropriation of |tO0 million covers expenditures for fl«c«»l yturs 19^-0 and ^)• „„ 100 Total 1,650 The Above -rograia cull a for an mp»ttdltmrt and investment during t h t cnlendar rear of 19^0 of a^4r»roxiaately 1.6 b i l l i o n . These euma are not a l l eia^loysent-creatlng ex Of the SI.6 billion additional expenditures called for under thle pro. r&m in 19^0* r-robably f*bout £1 b i l l i o n would create direct &n& indirect employment In the f i r s t instance. I t is estimated that by the end of th© calendar ye«r 19*4-0 a t least one million more m«n wouia be employed as a result of t h i s program. tf$ in addition to the above -program, something eff«e~ tive ie dftftt for non-Federal public ^orks and for railroad equipment the increase in employment would be substantially higher. HDW:lrs 6/1V39 ADDITIONAL PROPOSALS RBCOMfSBOBD BX *• fton-?«4eT*JL ftiM&c. forks. In order (a) to prevent a drastic decline In public works expend* iture in the Suonsr of 194Of (b) to provide for a continuing public works progrm.) and (c) to avoid the further heavy charge on the budget that would be entailed by continuation of present methods of financing; it is recommended that the Federal Government make an annual grant of 50 percent of the servicing charges of State and municipal borrowings for public works* In this way a billion dollar program could be financed at an annual charge on the budget of $27 million* Precedents exist in the U. I« Housing Authority and in British and Swedish sent practice* The Justification for this method of subsidising is that the public works are paid for while they are being used. Ape An adequate national old a#e pension program could be financed out of existing appropriations. In this way an additional $500 million could be contributed to consumption without entailing any additional charge on the budget. (See separate ) The combined public works and old age security proposals would add some $1 billion to the 'oovexnment** contribution to buying power at an additional cost to the budget of only |27 million. With the addition of these, proposals the total program would result in additional expenditures of from | 2 | to $3 billion, which would almost certainly assure a very marked degree of recovery in 1940. LBCtmh 6A4/39
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